INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 14 - Transitional provisions for conversion to 34% rate on 1 July 2000  

SECTION 160ATF   SERIES OF DIVIDENDS CROSSING OVER 1 JULY 2000  

160ATF(1)   [Application]  

This section deals with the situation in which:

(a) a company pays a number of dividends under a resolution made before 1 July 2000; and

(aa) before 1 July 2000, the dividends are declared under section 160AQF to be:

(i) if the company is not a life assurance company - class C franked; or

(ii) if the company is a life assurance company - class C franked, class A franked or both class C franked and class A franked; and

(b) some of the dividends (the first series dividends ) are paid before 1 July 2000; and

(c) some of the dividends (the second series dividends ) are paid on or after 1 July 2000.

160ATF(2)   [Dividend and declarations]  

For the purposes of this Part:

(a) the first series dividends and the second series dividends are to be taken to have been made under separate resolutions; and

(b) any declaration (the original declaration ) made under section 160AQF or 160ASEL in relation to the dividends is taken to have effect only in relation to the first series dividends; and

(c) the consequences provided for in the following table occur if the company does not make a declaration under section 160AQF or 160ASEL in relation to the second series dividends before the reckoning day for the second series dividends:

Default declaration for second series dividends
	If …	the company is taken to have declared that …	under …
1	the first series dividends were class C franked but not class A franked	each dividend in the second series is a class C franked dividend to the extent of the same percentage as in the original declaration	subsection 160AQF(1AAA)
.
2	(a)	the company is a life assurance company; and	each dividend in the second series is a class C franked dividend to the extent of the same percentage as in the original declaration	subsection 160AQF(1AAA)
	(b)	the first series dividends were class A franked but not class C franked
.
3	(a)	the company is a life assurance company; and	each dividend in the second series is a class C franked dividend to the extent of the sum of:	subsection 160AQF(1AAA)
	(b)	the first series dividends were both class C franked and class A franked	(a)	the percentage specified in the original declaration as the extent to which the dividend was class C franked; and
			(b)	the percentage specified in the original declaration as the extent to which the dividend was class A franked
.
4	the first series dividends were also franked with a venture capital franked amount	each dividend in the second series is a venture capital dividend to the extent of the same percentage as in the original declaration	section 160ASEL

Note 1:

Paragraph (a) means that the 2 series of dividends will have separate reckoning days (see the definition of reckoning day in section 160APA ). The reckoning day for the second series dividends will be the day on which the first of the second series dividends is paid. This in turn affects the calculation of the required franking amount for the second series dividends.

Note 2:

Paragraph (b) means that the company may make a fresh declaration under section 160AQF in relation to the second series dividends. The company may wish to do this to ensure that the second series dividends are franked to the new required franking amount that will need to be calculated under Division 4. It will also mean that the company may make a fresh declaration under section 160ASEL .